Consumer First Energy Act of 2008--Motion to Proceed

Floor Speech

CONSUMER-FIRST ENERGY ACT OF 2008--MOTION TO PROCEED -- (Senate - June 11, 2008)

BREAK IN TRANSCRIPT

Mr. CORNYN. Mr. President, I want to also read a letter from one of my constituents, Jerry from Denton, TX. That is just around Dallas. He wrote to me:

I work full time, have two part time jobs, and go to school full time and with living expenses I am having trouble keeping my head above water. My parents are both retired and drawing social security, my dad is also working as much as he can, but still they are just barely able to get by. My health insurance expires next month and I cannot afford it because of what I'm spending on gas right now.

Jerry adds:

We need a long term plan that allows for new sources of energy, but that does not involve the complete doing away with gas or making gas prices go so high. Something needed to be done months ago.

Well, I think Jerry is being overly generous. Something needed to be done far earlier than just a few months ago. We needed to do something about this 10 years ago. But, unfortunately, the birds have come home to roost, and now the American people are suffering high gas prices which affect every aspect of their lives.

Two days ago, I was in Houston, TX, at the Houston Food Bank. I heard from a senior citizen--a woman--who is disabled and whose food costs have gone up by 50 percent. Now, you may wonder, what is the connection between food costs and gasoline? Well, the fact is, the diesel or the gasoline the farmers need in order to produce the crop--to bring it in so it can be made available for us to buy and prepare for our tables--has driven food prices even higher.

As to some of the choices we have made in Congress--for example, to use food for fuel, things such as corn for ethanol--about 25 percent of our domestic corn crop now is used for biofuels, and we need to revisit that. But in the short term what we need to do is to bring down the price of gasoline at the pump. There are basically three ways we can do that: One is we can increase supply which, to me, is the most obvious answer.

I heard one of my colleagues this morning cite a new Gallup survey which points to the fact that American attitudes have changed dramatically with the facts; that is, as gas prices have gone higher--from January 4, 2007, when they were $2.33 a gallon to today where they are $4.05 a gallon--attitudes have changed about producing oil from domestic sources.

We are talking about in Alaska. We are talking about the Outer Continental Shelf where now China, off of our southern coastline is producing oil in basically an area where we could be producing it, but China is producing it for themselves while we have put a moratorium on producing that for ourselves.

Then there is a vast oil shale out in the Western States. It is estimated that in the Green River formation in Colorado, Utah, and Wyoming, there are as many as 2 trillion barrels of oil potentially available from that one location but approximately 6 trillion barrels of oil from producing oil shale using new technology that has not always been available. So we could bring down the price of gasoline, 70 percent of which is composed of the price of oil, by increasing American supply which will, in turn, reduce our dependency on imported oil from the Middle East.

Our colleague and friend, Senator Schumer of New York, acknowledged this recently--that supply can affect price--but he was talking about Saudi Arabia increasing their supply. I am not for increasing our dependence on Saudi Arabia or any other country; I am for greater independence by depending on our own domestic resources. But he said on this argument--on the supply-and-demand issue--on April 30: If they produced a half a million more barrels a day, the price would come down a very significant amount. At the same time, it would stop the speculation that keeps driving the price of oil up.

Well, I say he is half right. More supply--more American supply--would help dampen the speculation and help bring down the price which would help make more oil available to make into gasoline which would help all of our consumers and constituents at the pump. It would help people such as Jerry, who is trying to get by while going to school and trying to hold down two jobs in Denton, TX.

Fifty-seven percent, at last count, of the American people in a Gallup survey said they believe we ought to take advantage of the natural resources that God has given this country. I remember when I was in school; we would look at different countries and try to figure out why one was more successful, more prosperous, than another. Invariably, the teacher would say because the natural resources this country has are so vast, that is one of the reasons for the tremendous prosperity. America is the only country I know of that has this bounteous natural resource known as oil and gas and we have consciously decided--Congress has consciously decided--to put it out of bounds through various appropriations acts dating back to about 1982.

We need to reconsider this. I believe we need to change our ways and help relieve some of this pressure consumers are feeling at the pump, and the woman I was referring to at the Houston Food Bank who sees her food prices driven up, requiring her to be more in need of the good works and the charity of others, to help her with her food costs. This is something that I, frankly, do not understand--why Congress continues to be the impediment and not part of the solution.

Our friend from New York and others say: Well, we have a solution. There was a bill that was introduced and voted on yesterday, and frankly I agree with the Senator from Tennessee that it was not an energy bill because it didn't contain one additional drop of new energy. What it said was: Well, we are going to sue OPEC--the Organization of Petroleum Exporting Countries--including Venezuela and Iran, Saudi Arabia, and others, presumably to get them to open the spigot even wider so we can be more dependent on imported oil while continuing to put America's natural resources out of bounds. That is not a solution. Then they said: OK, we have an even better idea. People are mad at oil companies, so let's raise taxes on oil companies. That would be great, wouldn't it? It would make everybody feel good.

Well, the problem is that happened back in the 1980s, the so-called windfall profits tax, and do you know what happened? The Congressional Research Service has documented the fact that domestic oil production went down by 6 percent. In other words, it made us even more dependent on imported oil from the Middle East and elsewhere, not less dependent. So we want to repeat our mistakes. It is true that those who forget history are condemned to relive it, and I guess our friends on the other side of the aisle want us to relive that bad part of our history as far as our energy independence is concerned.

So as good as it may feel to some people to raise taxes to stick it to the oil companies, it is sticking it to yourself. In the end, everybody understands that when you raise taxes, eventually those taxes--those costs--are going to be passed down to--guess who. You got it: to the consumer. Rather than bringing down the price of gasoline, it is going to continue to drive up the price.

Last week we saw what I think is fair to say a very poorly timed presentation of the Boxer climate tax bill which, rather than bringing down the price of oil and gasoline, would have driven the price up. The National Association of Manufacturers estimated if we had passed that bill, it would have driven up electricity costs and gasoline costs by more than 145 percent.

So there is a better way for us to do this, but it is not by trying to force bad solutions, big Government solutions with $6.7 trillion in costs associated with it--ones which will backfire on us and increase the costs of gasoline and electricity. That is not a good solution. I think most people of good will and common sense would agree. We need to find a solution that will bring down those costs as we work toward that clean energy future that Senator Alexander and others have talked about; as we use more of our own natural resources, as we develop nuclear power to make electricity in a larger percentage as countries such as France do where 80 percent of their electricity is made from nuclear power; so we have electricity to recharge the battery on that hybrid plug-in vehicle that is going to be produced by General Motors and others in 2010 and beyond.

We are going to have to change some of the way we operate such as by conservation, by paying more attention to the environment, but also from a national security and economic perspective by trying to make sure we develop clean sources of energy. But as we are on that bridge to the future to clean energy independence, we are going to have to continue to depend on oil and gas. Doesn't it make sense that we would rely more on ourselves and less on others to help us with this important element of a prosperous economy, not to mention the thousands of additional jobs that would be created right here in the United States, if we would develop more of our own resources rather than depend on our adversaries to sell it to us so they can use the money to buy weapons to perhaps use those weapons against us?

Mr. President, I yield the floor.

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Mr. CORNYN. Mr. President, I rise to talk about the squeeze on the family budget that is being imposed by a combination of circumstances that, frankly, cry out for some relief.

As shown on this chart, this is how long it takes the average American family to work each year to pay their taxes: 74 days each year to pay their Federal taxes. Then you add State and local taxes on top of that. As you can see, that is a good part of the year, about a third of the year, people have to work to pay their taxes, before they can begin to pay any of the rest of their bills.

Then it takes 60 days out of the year to pay for their housing; 50 days out of the year to pay for their health insurance; 35 days out of the year to pay for their food; and 29 days out of the year to pay for transportation.

Now, this chart was prepared from a special report by the Tax Foundation, dated April 2008, having to do with Tax Freedom Day. That was the date they designated when you do not have to pay Uncle Sam or State and local taxes anymore, you are actually working for yourself. That is what we call Tax Freedom Day. But I daresay that this chart would have to be updated when it comes to the cost of food and the cost of transportation. That is what I wish to concentrate on with my remaining few minutes here.

Those related to the rising costs of energy--I have mentioned on the floor before being at the Houston Food Bank 2 days ago, where I learned that the cost of food is being dramatically increased as a result of the cost of energy that it takes to produce it by our farmers. Of course, that is being passed along to consumers, making it harder and harder on the most vulnerable among us, particularly seniors, people on fixed incomes, to pay for their food costs. Then, of course, you add on top of that the rising costs of gasoline and fuel, and it presents a real human crisis in many instances.

Many folks have said: Well, there is not much we can do about it--the cost of gasoline. They had said that when gasoline was at $2.33 a gallon. Actually, Speaker Pelosi, back before she became Speaker of the House, said if elected Speaker, the Democrats would present a commonsense plan to bring down the price of gasoline at the pump. That was the good old days. That was back when gasoline was only $2.33 a gallon. Now it is $4.05 a gallon, and we are still waiting--I would say with bated breath--for that commonsense solution which has yet to come.

But in the absence of a commonsense solution being offered by Speaker Pelosi, we have offered a solution that deals with the simple fact that when you have increasing worldwide demand for the same commodity, that one of the ways you can bring down the price is to increase supply. When you talk about the ways we can increase the supply of gasoline, well, you necessarily have to talk about increasing the supply of oil.

Then you get into the issue of how much of the oil we depend on to make into gasoline in our refineries is imported. Well, that figure now is about 60 percent of all of the oil we consume and the various petroleum-related products are produced abroad and shipped into the United States.

But we are in an ironic situation of where our dependency on imported oil is a consequence of our own failed policies here in the Congress because since 1982 Congress has imposed a moratorium on the development of America's natural resources right here at home, whether they be on the western lands, the oil shale, the Outer Continental Shelf surrounding our country, or places such as the Arctic National Wildlife Refuge. Congress has placed those out of bounds. We are the only country in the world that has placed our own natural resources out of bounds and refused to develop those while we have increased our dependence on imported energy from dangerous enemies of the United States--countries such as Iran and Venezuela, which professes to be our enemy in South America.

What is ironic is the fact that years ago, the United States and Cuba agreed to draw an imaginary line between our two countries and said Cuba had control of the submerged lands on the other side of that line leading up to Cuba and the United States had control of the 45 miles or so that represented American territory. But do you know who is developing the oil and gas that is 50 miles off our southern shore of Florida? Well, Cuba has production agreements with Brazil, Venezuela, Spain, China, Vietnam, India, Malaysia, Canada, and Norway. That is right. While we refuse, as a result of a Federal moratorium on development on the Outer Continental Shelf, to allow Americans to produce American energy, the Chinese and others are drilling and producing oil 50 miles off our shore in the area owned by Cuba. It is ironic indeed that we would prohibit Americans from producing American energy on American land so that we could remain increasingly dependent on foreign oil. I think it is a terrible mistake.

Congress, looking around for a scapegoat as to who has caused these high prices, I would suggest needs to look in the mirror. We need to reassess and correct that mistake by making this natural resource available for production.

Some have come up with what I consider to be misguided solutions that do nothing to produce additional supply of oil and gas. As a matter of fact, they try something we tried back in the 1980s, for example; that is, raise taxes on oil producers here in America. We found out in the 1980s, according to the Congressional Research Service, that it actually reduced domestic oil production by 6 percent.

Some may ask: Well, how is that possible? The fact is that 80 percent of the world's oil reserves are owned by national oil companies of foreign governments. Let me say that again. Eighty percent of the oil reserves in the world are owned by oil companies that are owned by foreign governments, and only 6 percent, 6 percent of the world's oil reserves are owned by stockholder-owned companies; in other words, the private sector--the ExxonMobils, the Chevrons, the Conoco-Phillips, and the like. Six percent owned by those privately owned or stockholder-owned companies, 80 percent owned by nations such as Saudi Arabia, Iran, Iraq, Kuwait, and others, just to name a few.

So the irony of ironies again would be not only to not allow us to develop our own natural resources but actually to tax the privately owned or shareholder-owned oil companies that control 6 percent of the world's resources while not touching the 80 percent owned by foreign countries because, of course, we can't impose a tax on their production here in America. We can only impose a tax on our own companies here in the United States. When we did that before, we decreased domestic production. We should have learned from that mistake, but sadly, as a philosopher once said, ``Those who refuse to learn from history are condemned to repeat it.''

This is almost like Groundhog Day here in the Senate where we continue to encounter the same failed solutions--or I should say ``nonsolutions''--to the same problems and refuse to look at the most obvious solution staring us in the face; that is, to open more of America's natural resources.

Now, earlier on the floor, the distinguished Democratic whip, Senator Durbin, talked about emergency situations and talked about price caps in an emergency and said we are in an emergency, implying that we should somehow--Congress should dictate price controls on gas. But I would suggest to the distinguished Senator that if we have an emergency situation--and I agree, we have something that profoundly affects our national security and our economic security and has a dramatic impact on food prices and on the average American family. We do have an emergency, and we ought to reassess our decision to block exploration and production in the Arctic National Wildlife Refuge, in the Outer Continental Shelf, in the shale oil in the western Federal lands and elsewhere which, by some estimates, could produce as many as 3 million additional barrels of oil each day. Now, that is not a panacea, but it is a lot of help in the near term.

As we develop those natural resources, of course, that means we depend that much less on imported oil. It creates jobs here in America at a time when our economy is softening and unemployment rates are going up, and it would help us be less dependent on some of the folks who wish us harm in this world. To me, it constitutes the kind of emergency Senator Durbin was talking about earlier, that we ought to--if you won't do it when gasoline is $2.33 a gallon, will you do it when gasoline is $4.05 as it is today? If you won't do it when gasoline is $4.05 a gallon, will you do it when it is $5 a gallon or $8 or how about $10 a gallon? At some point, there has to be a tipping point at which the Congress--and especially the Senate--will wake up and look in the mirror and say: You know what, we need to reassess this. We need to take action on behalf of the hard-working American family to make sure they don't continue to find themselves pinched not only by a rising tax burden, the cost of housing, the cost of health care, but rising food costs and rising transportation costs.

I have to say I was shocked when I saw an interview recently of Senator Obama, our colleague from Illinois. He was interviewed by CNBC's John Harwood, who asked him the question: Could these high prices help us? Senator Obama said: I think I would have preferred a gradual adjustment.

Well, I am not sure exactly what he means by that. Certainly, we haven't had a gradual adjustment; we have had a radical adjustment upward.

All we have had, frankly, from our friends on the other side of the aisle is a refusal to act in a responsible way to open America's energy resources while they offer what I have to say are misguided nonsolutions which produce no additional energy, things such as raising taxes on oil companies, which we know will only be put on America's privately owned companies and can't be placed on nationally owned oil companies in places such as Venezuela and Iran but also have had the demonstrated experience of actually reducing domestic production rather than increasing it. Hasn't our experience always been that when you increase the cost--especially increase taxes--on the producer, eventually that is going to be passed down to the ultimate consumer? So what it would do is have the effect of decreasing production, increasing dependence on imported oil, and raising the price of gasoline ultimately for the consumer at a time when we ought to be giving the consumer relief from these high prices if we can, and I believe we can by increasing supply.

So I hope our colleagues will reconsider their position because, frankly, I think the only thing standing between lower gasoline prices and the American people is the Congress.

On our side of the aisle, we have offered what we believe to be a commonsense solution that would increase supply, so we can hopefully add to the supply, with rising demand by countries around the world, in a way that will allow us to at least provide some relief to the American consumer as we transition ourselves to new alternative sources of energy that are not going to be immediately able to fill that role currently played by oil.

We know we are going to have to continue to depend on oil and gas for the near term, but as we transition ourselves into a clean energy future by increasing the use of nuclear power to generate electricity; as good, old-fashioned American ingenuity creates things such as plug-in hybrid cars that operate on batteries we can charge overnight and drive in many parts of the country in a way that will provide an alternative to internal combustion engines but which will also help us deal with environmental concerns as well; as we are on this bridge to a clean energy independence, we need to take advantage of the natural resources God has given us.

This is one of the things that has made our country so prosperous--the vast natural resources we have. But only the Congress is so mistaken as to impose a moratorium on the development and production of those natural resources, and it is hurting hard-working American families and the American consumer. We need to do something about it. I hope we do on a bipartisan basis soon.

I yield the floor.

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